IAS?
IAS 7
Designed to show changes in cash and cash equivalents
Shows movements only
Layout
Cash flows from operating activities
- cash from generated activities
- interest paid
- income taxes paid
Net cash flow from operating activities
Cash flow from investing activities
- Purchase of PPE
- Proceeds from sale of PPE
- interest received
- dividends received
Net cash used in investing activities
Cash flow from financing activities
- Proceeds from issue of share capital
- proceeds from issue of long term borrowings
- dividends paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
T accounts
Balance brought forward is on the side it relates to
Eg for a property plant and equipment (ASSET) it’s a debit
For tax it’s a credit
Disclosures
Components of cash and cash equivalents
Reconciliation showing the amounts in the statement of cash flows with the equivalent items shown in the statement of financial position
The accounting policy used in deciding the items included in cash and cash equivalents IAS 1
All entities should disclose together with a commentary by management, any other information likely to be of importance
Significant non cash transactions
Many investing and financing activities do not have a direct impact on current cash flows, although the they do affect the capital and asset structure of an entity.
Significant “non cash transactions” should be disclosed
Examples:
- Acquisition of assets either by assuming directly related liabilities or by means of a finance lease
- Acquisition of an entity by means of an issue of equity shares
- Acquisition of non current assets by means of a finance
Uk gaap comparison
FRS 102
Exemption from a preparation of a statement of cash flows
Available to members of a group where the parent prepares PUBLICLY AVAILABLE consolidated financial statements
And that member is included in the consolidation
IAS 7
Applies to all entities
